Recent Trends in Securities Class Action Litigation Report Released by NERA: Large Settlements Get Larger, Small Settlements Get Smaller
New York -- More securities class actions were filed in US federal court in 2013 compared to 2012 but the increase has been a small one, according to Recent Trends in Securities Class Action Litigation: 2013 Full-Year Review, an annual report released by NERA Economic Consulting.
In 2013, 234 securities class actions were filed, compared to 213 class actions filed in 2012, representing a 10% increase and a slight increase compared to the 224 average number of filings in the period of 2008 to 2012.
Filings of securities class actions involving alleged violations of Rule 10b-5, Section 11, or Section 12, saw a 15% increase over 2012, thereby exceeding the filings in any year in the 2009 to 2012 period. Filings in the 5th Circuit alleging violation of Rule 10b-5 more than doubled in 2013 to 13, compared to six filings in 2012 and five in 2011.
The number of class actions settled in 2012 came close to the record low of 2012. Only 100 securities class actions were settled in 2013, compared to 94 settlements reached in 2012 and the 127 average settlements per year in the period of 1996 to 2011.
Average settlement amounts for "usual" securities class actions in 2013 broke prior records, reaching $55 million, an increase of 53% over 2012 and a 31% increase over the previous high in 2009. (By "usual," we mean excluding settlements over $1 billion, merge objection settlements, and IPO laddering settlements.) The median settlement amount for 2013 was $9.1 million, a 26% decrease compared to 2012.
"Large settlements got larger, while small settlements got smaller in 2013," said report co-author Dr. Renzo Comolli. "Nine securities class action settlements last year passed the $100 million mark, driving the average settlement amount to its record high. In addition, numerous small settlements occurred in 2013, substantially driving down median settlement values."
NERA Securities Class Action Trends Report Series
NERA has been analyzing trends in securities class actions for more than 20 years. This year-end study, Recent Trends in Securities Class Action Litigation: 2013 Full-Year Review, is co-authored by NERA Senior Consultants Dr. Renzo Comolli and Svetlana Starykh. In addition to the trends discussed above, the 2013 version reviews: timing of filings in relation to recent Supreme Court decisions; number of filings by issuer's country of domicile, by circuit, and by sector; outcomes on motions to dismiss and motions for class certification; time to resolution; dismissal rates; attorneys' fees and other characteristics of securities class actions.
For more details and to read the report, visit: http://www.nera.com/67_8394.htm
NERA Economic Consulting (www.nera.com) is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For over half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world's leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.
NERA's clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world's largest economic consultancies. With its main office in New York City, NERA serves clients from more than 25 offices across North America, Europe, and Asia Pacific.